Ethical Consumer
  1. You are in:
  2. Home
  3. Ethical Money
  4. Banks profiting from the arms trade to the Middle East and North Africa

Banks profiting from the arms trade to the Middle East and North Africa

image: ethical consumer banking bae systems
Jane Turner
By
Jane Turner

Evidence shows that these crisis-affected countries are being supplied with arms by companies funded by European banks. As such, these banks are linked to the human rights abuses that occur in these countries.

Since 2000, an estimated 60% of the world’s conflict-related deaths have been in the Middle East and North Africa (MENA) region, while violence in Iraq, Libya, Syria, and Yemen continues to displace millions of people annually.

Non-profit organisation Facing Finance released a report in May 2019 highlighting the ten European banks with some of the highest investments in eleven of the global arms companies involved. The total finance amounted to €24.2 billion.

The largest volume of exports overall was to Saudi Arabia and the UAE – countries not only considered controversial for arms exports due to being defined as unfree countries themselves but also due to their role in the war in Yemen.

The civil war in Yemen

Yemen is the poorest country in the Middle East and, since March 2015, has been hosting a civil war between the Yemen government, backed by the Saudi-led coalition, and the Yemen rebels, backed by Saudi oil rival Iran. The Saudi-led Alliance has destroyed Yemen’s means of food production, targeting factories, farmland, warehouses, and markets. Yemen’s health system has “almost collapsed” after the bombing of hospitals, clinics, and vaccinations centres.

The UN had verified the deaths of at least 7,700 civilians by March 2020, with most caused by Saudi-led coalition airstrikes. Monitoring groups put the figure as high as 12,000. Thousands more civilians have died from preventable causes, including malnutrition, cholera, and other diseases. The United Nations has warned that the death toll from the coronavirus pandemic could "exceed the combined toll of war, disease, and hunger over the last five years."

About 80% of the population – 24 million people – need humanitarian assistance and protection. Some 20 million people need help securing food, according to the UN. Almost 10 million of them are considered "one step away from famine".

Who are they funding and how much?

All of the companies listed in the table below are also listed on the opposite page for funding nuclear weapons producers.

Investment company BlackRock has investments of €32.6 billion in the weapons companies in the report. This is far more than all ten European banks combined. This is despite stating that it expects all the companies in its portfolio to make “a positive contribution to society”.

Lloyds Bank was one of the two largest overall providers of loans to the arms companies, totalling €4.1 billion. Lloyds provided finance to General Dynamics (which has exported to Egypt and Saudi Arabia and is involved in the production of nuclear weapons) totalling €2.4 billion.

In terms of actual shareholdings in the arms companies. Deutsche Bank ranked second of all the banks with holdings in all of the arms companies, totalling €2.6 billion.

Finance company Finance provided eg loans (€m) 2015 - 2019 Investments eg shareholding (€m) as of Jan 2019
BlackRock – owns 10% of Janus Henderson ethical investment funds   32,600.0
Lloyds Bank 4,129.99 4.29
Barclays 1,216.09 1,634.85
Banco Santander 1,635.43 97.65
Deutsche Bank – owns 19% of ICICI Bank 1,814.41 2,615.29
BNP Paribas – owns 25% of Impax ethical investment fund 2,320.26 1,081.84

Facing Finance e.V. is a non-profit organisation headquartered in Berlin that takes a stand against financial corporations’ violations in the areas of environment and climate change, labour and human rights, corruption, and any use of weapons that are against international law. Read the full report here.

Looking for a more ethical bank - see our guide to ethical bank accounts. 

We always check the ethics of our advertisers

Magazine cover

Free Issue

Sign up now to our email newsletter for a free digital copy of Ethical Consumer magazine.

Sign up to our email newsletter